1

GPHR
2022

Functional Area 04
Workplace Culture

Global Professional in Human Resources

INTERNATIONAL HUMAN RESOURCE CERTIFICATION INSTITUTE

IHRCI ® | www.ihrci.org
 Global Professional in Human Resources (GPHR) Workbook

Module Four: Workplace Culture

2022 Edition

Copyright © 2022 by International Human Resource Certification Institute

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Introduction
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Table of Content

Introduction ............................................................................................................................... iii

Table of Content ........................................................................................................................ iv
Part One: Cultural Differences and Dynamics ............................................................................ 8
1. Nature of Culture ............................................................................................................ 8
1.1. Definition ............................................................................................................. 8
1.2. Characteristics of Culture .................................................................................... 8
1.3. Type of Culture .................................................................................................. 11
1.4. Layers of Culture ................................................................................................ 12
1.5. Values in Culture................................................................................................ 12
2. National Culture ........................................................................................................... 13
2.1. Individualism vs. Collectivism ............................................................................ 13
2.2. Masculinity vs. Femininity ................................................................................. 14
2.3. Uncertainty Avoidance ...................................................................................... 14
2.4. Power Distance .................................................................................................. 14
2.5. Time Perspective ............................................................................................... 15
2.6. Indulgence/Restraint ......................................................................................... 15
3. Organization Culture..................................................................................................... 15
3.1. Definition ........................................................................................................... 15
3.2. Climate and Culture ........................................................................................... 17
3.3. Organizational Culture, Strategy, Structure, and Operations ............................ 17
4. Managing Cultural Differences ..................................................................................... 20
4.1. Universalism vs. Particularism (Rules Versus Relationships) ............................. 20
4.2. Individualism vs. Communitarianism (The Individual Versus The Group) ........ 20
4.3. Neutral vs. Emotional (How People Express Emotions) .................................... 21
4.4. Specific vs. Diffuse (How Far People Get Involved) ........................................... 21
4.5. Achievement vs. Ascription (How People View Status) .................................... 21
4.6. Sequential Time vs. Synchronous Time (How People Manage Time) ............... 22
4.7. Inner-directed vs. Outer-directed (How People Relate to Their Environment) 22
5. Diversity Culture ........................................................................................................... 22
5.1. Family ................................................................................................................ 23
5.2. Eiffel Tower ........................................................................................................ 23
5.3. Incubator ........................................................................................................... 23
5.4. Guided Missile ................................................................................................... 24
6. Intercultural Communication ....................................................................................... 24
6.1. Low context culture ........................................................................................... 25
6.2. High context culture .......................................................................................... 25
 7. Merging Culture............................................................................................................ 25
7.1. Assimilation ....................................................................................................... 27
7.2. Deculturation ..................................................................................................... 27
7.3. Integration ......................................................................................................... 27
7.4. Separation ......................................................................................................... 27
8. The Effect of Culture on Global HR ............................................................................... 30
8.1. Ethnocentrism and parochialism....................................................................... 30
8.2. Cultural Stereotypes .......................................................................................... 30
8.3. Cultural Determinism ........................................................................................ 30
8.4. Cultural Relativism............................................................................................. 31
8.5. Cultural Differences ........................................................................................... 31
Part Two: Cultural Adjustment and Learning ........................................................................... 32
1. Cross-Cultural Differences ............................................................................................ 32
1.1. Different Communication Styles ....................................................................... 32
1.2. Different Attitudes Toward Conflict ................................................................... 33
1.3. Different Approaches to Completing Tasks ....................................................... 33
1.4. Different Decision-Making Styles ...................................................................... 33
1.5. Different Attitudes Toward Disclosure .............................................................. 34
1.6. Different Approaches to Knowing ..................................................................... 34
2. Cross Culture Shock ...................................................................................................... 34
2.1. Symptoms of Culture Shock .............................................................................. 35
2.2. Process of Culture Shock ................................................................................... 35
2.3. Culture Shock Adjustment ................................................................................. 37
3. Reverse Culture Shock .................................................................................................. 40
3.1. The Honeymoon Stage ...................................................................................... 41
3.2. The Distress Stage (Reverse Culture Shock) ...................................................... 41
3.3. Re-integration Stage .......................................................................................... 44
3.4. Independence Stage .......................................................................................... 44
4. Develop Intercultural Sensitivity .................................................................................. 44
4.1. The Ethnocentric Stages .................................................................................... 46
4.2. The Ethnorelative Stages ................................................................................... 49
5. Cross Culture Training (CCT) ......................................................................................... 53
5.1. Didactic Training ................................................................................................ 54
5.2. Experiential Training .......................................................................................... 55
5.3. Attribution Training ........................................................................................... 56
5.4. Language Training .............................................................................................. 56
5.5. Cultural Awareness Training .............................................................................. 57
5.6. Interaction Training ........................................................................................... 57
 5.7. Cognitive Behavior Modification ....................................................................... 57
5.8. Sequential Training ............................................................................................ 57
Part Three: Cross-cultural Teams and Diversity........................................................................ 61
1. Global Mindset ............................................................................................................. 61
1.1. Intellectual Capital............................................................................................. 61
1.2. Psychological Capital ......................................................................................... 63
1.3. Social Capital ..................................................................................................... 64
1.4. Cultivate a Global Mindset ................................................................................ 65
2. Cross Culture Management .......................................................................................... 70
2.1. Universalism Versus Particularism .................................................................... 70
2.2. Individualism Versus Collectivism ..................................................................... 71
2.3. Neutral Versus Emotional .................................................................................. 72
2.4. Specific Versus Diffuse ....................................................................................... 73
2.5. Achievement Versus Ascription ......................................................................... 74
2.6. Sequential Versus Synchronous ........................................................................ 74
2.7. Internal Control Versus External Control ........................................................... 75
3. Cross Culture Team ....................................................................................................... 76
3.1. Team Development ........................................................................................... 77
3.2. Organizational Context ...................................................................................... 78
3.3. Cultural Factors.................................................................................................. 80
3.4. Individual Differences ........................................................................................ 81
4. Performance in Different Cultures ............................................................................... 81
4.1. Power Distance .................................................................................................. 82
4.2. Uncertainty Avoidance ...................................................................................... 83
4.3. Individualism versus Collectivism ...................................................................... 84
4.4. Masculinity versus Femininity ........................................................................... 86
4.5. Short-Term Orientation versus Long-Term Orientation .................................... 87
5. Global Diversity ............................................................................................................ 88
5.1. Create Partnership ............................................................................................. 90
5.2. Develop Diversity Strategy ................................................................................ 91
5.3. Create a global diversity structure .................................................................... 91
5.4. Communicate the diversity ............................................................................... 93
5.5. Implement the diversity strategy ...................................................................... 93
5.6. Two Approaches ................................................................................................ 94
6. Corporate Social Responsibility (CSR) .......................................................................... 95
6.1. Corporate social responsibility (CSR) ................................................................ 95
6.2. Sustainable Development Goals (SDGs) ............................................................ 95
6.3. Environmental, Social, and Governance (ESG) .................................................. 95
 6.4. Social Return on Investment (SROI) .................................................................. 96
6.5. HR and CSR/SDGs/ESG/SROI ............................................................................. 96
Reference................................................................................................................................ 102
8

Part One: Cultural Differences and Dynamics

1. Nature of Culture

International business deals not only cross borders, they also cross cultures. Culture
profoundly influences how people think, communicate, and behave. It also affects the
kinds of transactions they make and the way they negotiate them.

Culture has a pervasive impact on the management of human resources. Culture

influences how blue- and white-collar workers respond to pay and non- pay incentives,
how international firms are organized, the success of multinational work teams, and
even how executives compose and implement business strategies.

1.1. Definition

“Culture” refers to the complex collection of knowledge, folklore, language, rules,

rituals, habits, lifestyles, attitudes, beliefs, and customs that link and give a common
identity to a particular group of people at a specific point in time.

1.2. Characteristics of Culture

Culture is learned human behavior specific to a group in which values are shared and
expressed through various practices. These practices depend very heavily (although
not exclusively) on language.

All social units develop a culture. Even in two-person relationships, a culture develops
over time. In friendship and romantic relationships, for example, partners develop
their own history, shared experiences, language patterns, rituals, habits, and customs
that give that relationship a special character—a character that differentiates it in
various ways from other relationships. Examples might include special dates, places,
songs, or events that come to have a unique and important symbolic meaning for two
individuals.

Groups also develop cultures, composed of the collection of rules, rituals, customs,
and other characteristics that give an identity to the social unit. For example, issues
such as where a group traditionally meets, whether meetings begin on time or not,
what topics are discussed, how decisions are made, and how the group socializes
become defining and differentiating elements of the group’s culture.

Organizations also have cultures, often apparent in particular patterns of dress, layout
of workspaces, meeting styles and functions, ways of thinking about and talking about
the nature and directions of the organization, leadership styles, and so on.
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Cultures are created through communication; that is, communication is the means of
human interaction through which cultural characteristics (customs, roles, rules, rituals,
laws, or other patterns) are created and shared. Cultures are a natural by-product of
social interaction. In a sense, cultures are the “residue” of social communication.
Without communication and communication media, it would be impossible to
preserve and pass along cultural characteristics from one place and time to another.
One can say, therefore, that culture is created, shaped, transmitted, and learned
through communication. The reverse is also the case; that is, communication practices
are largely created, shaped, and transmitted by culture.

1.2.1. Cultures are subjective

There is a tendency to assume that the elements of one’s own cultures are logical and
make good sense. It follows that if other cultures—whether of relationships, groups,
organizations, or societies—look different; those differences are often considered to
be negative, illogical, and sometimes nonsensical. People who are used to informal
meetings of a group might think that adherence to formal meeting rules is strange and
stilted. Employees in an organization where suits are worn every day may react with
cynicism and questioning when they enter an organization where casual attire is
standard practice. With regard to culture, the tendency for many people is to equate
“different” with “wrong”, even though all cultural elements come about through
essentially identical communication processes.

1.2.2. Cultures change over time

In fact, cultures are ever changing—though the change is sometimes very slow and
imperceptible. Many forces influence cultural change. Since cultures are created
through communication, it is also through communication between individuals that
cultures change over time. Each person involved in a communication encounter brings
the sum of his or her own experiences from other (past or present) culture
memberships. In one sense, any encounter between individuals in new relationships,
groups, organizations, or societies is an intercultural communication event, and these
varying cultural encounters influence the individual and the cultures over time. Travel
and communication technologies greatly accelerate the movement of messages from
one cultural context to another, and in small and large ways, cultures come to
influence one another through communication. Phrases such as “melting pot,” “world
community,” and “global village” speak to the inevitability of intercultural influence
and change.

1.2.3. Cultures are largely invisible

10

Much of what characterizes cultures of relationships, groups, organizations, or

societies is invisible to its members. Language, of course, is visible, as are greeting
conventions, special symbols, places, and spaces. However, the special and defining
meanings that these symbols, greetings, places, and spaces have for individuals in a
culture are far less visible. Consequently, opportunities to “see” culture and the
dynamic relationship that exists between culture and communication are few. Two
such opportunities do occur when there are violations of cultural conventions or when
there is cross-cultural contact.

When someone violates an accepted cultural convention, ritual, or custom - for

example, by speaking in a foreign language, standing closer than usual while
conversing, or discussing topics that are typically not discussed openly the other
members of the culture become aware that something inappropriate is occurring.
When “normal” cultural practices are occurring, members of the culture think little of
it, but when violations occur, the members are reminded of the pervasive role that
culture has on daily life.

When visiting other groups, organizations, and, especially, other societies, people are
often confronted by—and therefore become aware of— different customs, rituals,
and conventions. These situations often are associated with some awkwardness, as
the people strive to understand and sometimes to adapt to the characteristics of the
new culture. In these circumstances, again, one gains a glimpse of “culture” and the
processes by which people create and adapt to culture.

1.2.4. Cultures are influenced by media

All institutions within society facilitate communication, and in that way, they all
contribute to the creation, spread, and evolution of culture. However, communication
media such as television, film, radio, newspapers, compact discs, magazines,
computers, and the Internet play a particularly important role. Because media extend
human capacities for creating, duplicating, transmitting, and storing messages, they
also extend and amplify culture-building activities. By means of such communication
technology, messages are transmitted across time and space, stored, and later
retrieved and used. Television programs, films, websites, video games, and compact
discs are created through human activity—and therefore reflect and further extend
the cultural perspectives of their creators. They come to take on a life of their own,
quite distinct and separate from their creators, as they are transmitted and shared
around the increasingly global community.

1.2.5. Cultures depend on communication

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Understanding the nature of culture in relationship to communication is helpful in

several ways. First, it helps to explain the origin of differences between the practices,
beliefs, values, and customs of various groups and societies, and it provides a
reminder of the communication process by which these differences came into being.
This knowledge can and should heighten people’s tolerance for cultural differences.
Second, it helps to explain the process that individuals go through in adapting to new
relationships, groups, organizations, and societies and the cultures of each. Third, it
underscores the importance of communication as a bridge between cultures and as a
force behind cultural change.

1.2.6. Cultures are shaped by communication

As communication increases between individuals, groups, and countries, does this

mean that cultural differences and traditions will inevitably erode altogether? Will the
cultures of individuals from groups, organizations, and societies that have great access
to and control of communication media overpower those in cultures that have fewer
resources and less access and control? Can knowledge be used to help individuals
more comfortably and effectively adapt to new relationships, groups, organizations,
and societies? The importance of these issues makes this area an important one for
continued examination by scholars and practitioners.

We all communicate with others all the time -- in our homes, in our workplaces, in the
groups we belong to, and in the community. No matter how well we think we
understand each other, communication is hard. "Culture" is often at the root of
communication challenges. Our culture influences how we approach problems, and
how we participate in groups and in communities. When we participate in groups we
are often surprised at how differently people approach their work together.

1.3. Type of Culture

1.3.1. National Cultures

National cultures comes a host of differences in assumptions, outlook, and rules that
can challenge communication and comprehension.

1.3.2. Subcultures

There can be significant distances between subcultures within the same national
culture. Subcultures may be defined by ethnicity, geographic region, race, religion, or
class.
12

1.3.3. Organizational/Corporate Cultures

Organizational culture is defined by all of the life experiences, strengths, weaknesses,

education, upbringing, and so forth of the employees. While executive leaders play a
large role in defining organizational culture by their actions and leadership, all
employees contribute to the organizational culture.

1.3.4. Industry Cultures

Industry cultures have shared assumptions based on technological and social histories
of the industry.

1.3.5. Professional or Functional Cultures

Professional and functional cultures have shared assumptions based on specifics as

they relate to a special function or occupation.

1.4. Layers of Culture

1.4.1. Level 1-Artefacts: Described as being the ‘easiest’ level to observe, called
explicit culture

1.4.2. Level 2-Espoused Values: To better understand and to help decipher why the
initial observations in Level 1 are taking place, one needs to ask ‘insiders’ of the
organization to try and explain.

1.4.3. Level 3-Shared Tacit Assumptions: To help understand this ‘deeper’ level of
culture, one needs to investigate the history of an organization.

1.5. Values in Culture

The word "value" means worth. It also refers to an ethical precept on which we base
our behavior. Values are basic convictions that people have regarding what is right and
wrong, good and bad, important or unimportant. Values are shaped by the culture in
which we live and by our experiences. However, there are values that are held high by
most cultures. These include fairness and justice, compassion and charity, duties and
rights, human species survival and human well-being.

Organizational culture and values are closely related because organizations are
generally founded with certain values in mind. These values tend to influence the
organizational structure, but they may change over time as different people take on
different roles in the organization and the overall culture changes. Organizational
 13

culture and values, then, both affect each other over time and tend to change if a
conflict exists between them.

2. National Culture

The values that distinguished countries (rather than individuals) from each other
grouped themselves statistically into four clusters. They dealt with four
anthropological problem areas that different national societies handle differently:
ways of coping with inequality, ways of coping with uncertainty, the relationship of the
individual with her or his primary group, and the emotional implications of having
been born as a girl or as a boy. These became the Geert Hofstede dimensions of
national culture: Power Distance, Uncertainty Avoidance, Individualism versus
Collectivism, Masculinity versus Femininity, and Long-term orientation versus Short-
term orientation.

Hofstede’s Cultural Dimensions

Individualistic/Collectivistic How personal needs and goals are prioritized vs. needs and
goals of the group/clan/organization.

Masculine/Feminine Masculine societies have different rules for men and

women, less so in feminine culture.

Uncertainty Avoidance How comfortable are people with changing the way they
work or live (low UA) or prefer the known systems (high UA)

Power Distance The degree people are comfortable with influencing

upwards.

Accept of inequality in distribution on power in society.

Time Perspective Long-term perspective, planning for future, perseverance

values vs. short time past and present oriented.

Indulgence/Restraint Allowing gratification of basic drives related to enjoying life

and having fun vs. regulating it through strict social norms.

2.1. Individualism vs. Collectivism

Individualism is the tendency of people to look after themselves and their immediate
family only; Individualism is the preference of people to belong to a loosely knit
society where importance is placed on the self and autonomy. In opposition,
14

collectivism is the tendency of people to belong to groups or collectives and to look

after each other in exchange for loyalty. Collectivist structures place importance on
interdependent social units such as the family, rather than on the self. In individualist
societies, employees require the freedom to work independently and desire
challenging work (which is more important than personal relationships) that will help
them reach self-actualization. In collectivist cultures, unquestioned management
structures are responsible for the organization of teams of employees and the
cohesion of the collective.

2.2. Masculinity vs. Femininity

Masculinity is a culture in which the dominant values in society are success, money,
and that score high on masculinity; masculinity represents cultures with distinct
gender roles where men focus on success, competition and rewards while women
focus on tender values such as quality of life and modesty. Femininity represents
cultures where gender roles overlap. Femininity is a culture in which the dominant
values in society are caring for others and quality of life scores high on femininity. In
masculine cultures managers are defined as more assertive and decisive, whereas
feminine cultures breed more intuitive managers who negotiate disputes and
encourage participation in decisions.

2.3. Uncertainty Avoidance

Uncertainty avoidance is the degree to which members of a culture feel threatened or

uncertain in unfamiliar situations. Thus in high uncertainty avoidance cultures, people
prefer a structured environment with rules and policies in place. Hard work is
embraced, and there is a greater sense of anxiety amongst the workforce. In contrast,
in weak uncertainty avoidance cultures rules create discomfort, almost fear, and exist
only where absolutely necessary. People tend to be more relaxed in these cultures,
and work at a slower pace. High uncertainty avoidance favors precise rules, teachers
who are always right and superiors who should be obeyed without question. Low
uncertainty avoidance favors flexibility, discussion and delegation of decision making.

2.4. Power Distance

Power distance is the extent to which less powerful members of institutions and
organizations accept that power is distributed unequally. In high power distance
cultures, children are raised with a great emphasis on respecting elders, which is
carried through to adulthood. Therefore organizations are more centralized,
employees prefer a more autocratic leadership style where subordinates are expected
to be told what to do and there are wide wage gaps in the hierarchical structure. On
 15

the other hand, in low power distance cultures inequality is not desired, employees
prefer to be consulted with regards to decision making and thus prefer a more
resourceful and democratic leader.

2.5. Time Perspective

Following Hofstede, a subsequent study based on Chinese Confucian Theory revealed

a fifth dimension referred to as long-term orientation. This describes the extent to
which people have a dynamic, future-oriented perspective. It describes societies' time
horizon. Long-term oriented societies attach more importance to the future. They
foster pragmatic values oriented towards rewards, including persistence, saving and
capacity for adaptation. In short term oriented societies, values promoted are related
to the past and the present, including steadiness, respect for tradition, preservation of
one's face, reciprocation and fulfilling social obligations.

2.6. Indulgence/Restraint

Indulgence societies tend to allow relatively free gratification of natural human desires
related to enjoying life and having fun whereas Restraint societies are more likely to
believe that such gratification needs to be curbed and regulated by strict norms.
Indulgent cultures will tend to focus more on individual happiness and well-being,
leisure time is more important and there is greater freedom and personal control.
This is in contrast with restrained cultures where positive emotions are less freely
expressed and happiness, freedom and leisure are not given the same importance.

3. Organization Culture

3.1. Definition

Organizational culture is influenced by the “surrounding society,” “personal value

priorities of organizational members,” and “the nature of the organization’s primary
tasks.” Organizations are embedded into societies, which can be defined by certain
national culture values. Different tasks require different organization and execution of
activities, that is, different strategies and structures. It seems obvious that a
production company differs severely from a service provider, or a state agency from a
private firm, not only with respect to final products but also with respect to their
organizational culture. Simply put, organizational culture is the way we do things
around here.

According to Edgar Schein, organizational culture mainly consists of three domains: (a)
basic underlying assumptions (unconscious taken for granted beliefs and values: these
are not visible), (b) espoused values (may appear through surveys), and (c) artifacts
16

(visible behavior).

Artifacts are the easiest to notice, but yet their meanings may remain elusive to
outsiders. Through a process of realization, artifacts take on the symbolic meaning of
the organization values. Only those that have been educated in the organization
culture will know and understand the larger meaning behind the artifact.

Values form another integral part of organizational culture. When an organization

faces a crisis, its leaders must formulate a plan to alleviate the danger posed.
Successfully thwarting the crisis validates the plan and it becomes a shared value of
the organization. When a similar crisis arises in the future, the organization will reuse
the plan to avert catastrophe and right the ship. After repeated success, the value
becomes an underlying assumption of the organization.

Mary Jo Hatch extended Schein’s model by adding a fourth domain, called “symbols”.
She defines the processes that link each element of the organizational culture
construct, which provides a somewhat better understanding of interdependencies
between assumptions, values, artifacts, and symbols. Hatch assumes that there exist
two possible ways how observable behavior emerges through underlying
assumptions: (a) through “manifestation” into values and “realization” into artifacts or
(b) through “interpretation” into symbols and through “symbolization” into artifacts.

Artifacts manifestation Values realization

(visible behavior)

Espoused values
Assumptions Artifacts
(rules, standards prohibitions)

Basic underlying assumptions

interpretation Symbols symbolization
(invisible, unconscious)

Schein (1985) Hatch (1993)

Source: Dauber, D., Fink, G., & Yolles, M. (2012). A Configuration Model of Organizational
Culture. Sage Open Journal.

These underlying assumptions form the basic core of all organizational culture. They
are difficult to know and understand because they are rarely articulated. In order for
one to determine the assumptions of an organization one must become immersed in
the organization and its culture. Underlying assumptions manifest themselves through
 17

the perceptions, thoughts, emotions, and behaviors of members of the organization.

When an idea is posited that does not conform to the underlying assumptions of an
organization then that idea is rejected outright without any thought or debate. Any
challenges to these assumptions will result in defensive behavior from the members.
Therefore organizational culture can explain the resistance, fear, and sometimes
irrational behavior that one encounters in any organization, especially when trying to
implement change.

3.2. Climate and Culture

At this juncture it is important to differentiate between climate and culture. Climate

consists of the day to day feelings of the members of the organization and is highly
susceptible to changes within the organization. The climate will be very good for a
time if the staff receives raises or if the company is furnished with new equipment.
Conversely, if budget cuts occur or the number of staff reduced the climate will suffer.
These conditions are all temporary, whereas culture is more permanent and lasting.
Culture can and does change, but at a much slower rate than climate. It is a powerful
force that can encourage and support an individual effort or thwart them before they
are started. Organizational culture can be used to both explain and create end results.

All companies have an organizational culture, which represents the intangible force
that centers on a company’s values and beliefs. Individuals typically work at a
company with which their values match the most. One result of organizational culture
is to develop a climate by which a company can measure successes attached to this
intangible force. This starts the relationship between the organizational culture and
climate. While organizational culture is often a naturally occurring phenomenon in
organizations, the organizational climate often takes more work to implement.

A company’s organizational culture and climate are not always static. As a company
evolves, so does its culture. This often leads to changes in the organizational climate
as managers and employees change, along with the values and beliefs in the business.
The organizational climate must adjust as necessary to ensure the company measures
the correct factors.

3.3. Organizational Culture, Strategy, Structure, and Operations

Following Schein, “organizational culture” represents underlying, unobservable

assumptions, which constitute the basis for every organization. “Organizational
strategy” provides rules, norms, and regulations, which are set into effect through
organizational structures. Therefore, strategy belongs to an unobservable domain and
can be allocated to “espoused values.” “Organizational design, structure, and process”
18

as well as “organizational behavior and performance” are those elements of an

organization that are visible to its members as well as the external environment; that
is, they represent artifacts.

Strategies are commonly defined as the overall orientation of an organization for

reaching preset goals and objectives, that is, a long-term plan for maximizing profits or
covering costs, in case of nonprofit organizations. Furthermore, organizational
strategy “is an organization process, in many ways inseparable from the structure,
behavior and culture of the company in which it takes place”. Strategies influence the
interaction between structures and behavior and vice versa. Researchers argued that
“espoused values” have an impact on “artifacts,” which in turn influence “espoused
values.” As organizational structures as well as behavior were identified as elements
of organizational artifacts, both are affected by strategy. Different strategies require
different structures. In contrast, structures provide the frame of reference for future
information processing and strategic decision making, commonly known as
“reporting.” Thus, it is also true that structures have an impact on future strategies.

Processes that turn organizational strategies into action, commonly known as

“operationalization,” “implementation of strategies,” or “strategy doing,” unfold
through organizational structures and organizational activities. Strategies are put into
effect through organizational structures and behavior.

Organizational structures and behavior constitute the observable manifestation of

organizational strategies (espoused values). Structures build the frame of reference
for running organizational operations and guide or cushion behavior of members of an
organization, which translate into certain “patterns of behavior” supported by
organizational structures. At the same time, behavior is also reversely linked to
structures. Considering that organizations might need to change over time, for
example, due to extensive internationalization via mergers and acquisitions (M&A), it
may become necessary to restructure certain or even all parts of an organization.
Especially in M&A, this seems of particular importance to align organizational
behavior of new employees in such a way that strategic goals can be accomplished
efficiently and economically via organizational tasks. Thus, structures need to change
if organizational behavior does not lead to the expected performance.

Through performance assessment (i.e., inward-oriented operations), changes in

strategy and structure can be triggered, but learning processes rely on favorable
organizational conditions such as open communication structures, which would allow
organizations to learn. Assessing the efficiency of operations represents a binding
condition for organizational learning that leads to changes in strategy. Single-loop
 19

learning, as distinguished from double-loop learning, refers to the processes of

detecting errors and adjusting existing strategies to meet new requirements.

Double loop learning, however, considers a more profound process of learning, where
“underlying organizational policies and objectives.

Double-loop learning, questions existing underlying assumptions, that is,

organizational culture, and may lead to more fundamental changes in strategies and
their operationalization. Although single-loop learning is a precondition for double-
loop learning, it would be wrong to assume that single-loop learning automatically
effectuates double-loop learning. Many organizations are quite capable of single-loop
learning, but fail to learn on a higher level, that is, double-loop learning.

Basic Espoused Artifacts

underlying values
assumption Guidance
(values guide the
process of
operationalization) Operationalization Patterns of
behavior

ORGANIZATIONAL
STRATEGY STRUCTURE OPERATIONS
CULTURE

Performance
Double-loop Single-loop assessment
Learning Learning

Relationship between culture, strategy, structure, and operations

Source: Dauber, D., Fink, G., & Yolles, M. (2012). A Configuration Model of Organizational
Culture. Sage Open Journal.

Understanding organizational processes = understanding organizational (culture)

change = understanding organizational (culture) dynamics

In conclusion, (a) Operationalization has to stand in line with corporate values. (b) All
domains—strategy, structure, and operations—are indirectly affected by culture. (c)
Organizational values constitute the shared “ethics” of doing business. If the impact of
organizational culture on operations unfolds through strategy (i.e., espoused values),
which supports the idea of a “guiding” or moderating influence on organizations
during operationalization. Organizational culture reflects internal processes of an
organization, linking organizational culture, strategy, structure, and operations
20

systematically to each other.

4. Managing Cultural Differences

As discussed above, it's important to understand the differences between cultures, so

that we can work with people more effectively, and prevent misunderstandings.
Trompenaars and Hampden-Turner's Seven Dimensions of Culture help us do this. The
Seven Dimensions of Culture were identified by management consultants Fons
Trompenaars and Charles Hampden-Turner, and the model was published in their
1997 book, "Riding the Waves of Culture." According to Trompenaars, culture is a way
a group of people act to solve problems.

From three basics which are the relationship with others, time and environment,
Trompenaars identifies seven fundamental dimensions of culture. His definition of
culture is a mix between organizational and national cultures.

4.1. Universalism vs. Particularism (Rules Versus Relationships)

Universalism implies that correct behavior can be defined and always applies, while
particularism suggests that relationships are more important than abstract social
codes. In universalistic cultures, people place a high importance on laws, rules, values,
and obligations. They try to deal fairly with people based on these rules, but rules
come before relationships. On the contrary, in a particularistic culture, People believe
that each circumstance, and each relationship, dictates the rules that they live by.
Their response to a situation may change, based on what's happening in the moment,
and who's involved.

Typical universalistic cultures include the U.S., Canada, the U.K, the Netherlands,
Germany, Scandinavia, New Zealand, Australia, and Switzerland. Typical particularistic
cultures include Russia, Latin-America, and China.

4.2. Individualism vs. Communitarianism (The Individual Versus The Group)

Individualism refers to people as individuals; Communitarianism (Collectivism) refers

to people regard themselves as part of a group. In individualistic cultures, People
believe in personal freedom and achievement. They believe that you make your own
decisions, and that you must take care of yourself. In the second case, people believe
that the group is more important than the individual. The group provides help and
safety, in exchange for loyalty. The group always comes before the individual.

Typical individualist cultures include the U.S., Canada, the U.K, Scandinavia, New
Zealand, Australia, and Switzerland. Typical communitarian cultures include countries